The LSTA advocates on behalf of the loan market, and focuses on critical matters (regulations under Dodd-Frank, Leveraged Lending Guidance, FATCA and Bankruptcy reform) that could dramatically affect the loan market and the broader economy.

Comment Letters & Papers

The LSTA submits comment letters to federal regulators and members of Congress on proposed rules and legislation that could impact the loan market and our members.

Displaying 1-37 of 37 results.

Date

Title/Description

Files

Oct 17, 2018

Comment Letter on Proposed Changes to the Volcker Rule

The LSTA submitted a comment letter on proposed changes to the Volcker Rule. Importantly for the loan and CLO markets, the proposal puts into play the issue of whether banks can own the debt securities of CLOs that hold bonds. The LSTA’s comment letter focuses on two points. First, it suggests that the final rule’s “loan securitization” exclusion be modified to include even traditional CLOs that have modest baskets for bonds or assets other than loans. Including traditional CLOs in the definition of loan securitizations would be consistent with the congressional intent as reflected in the Volcker Rule’s “rule of construction” regarding loan securitizations since CLOs that existed at the time of the passage of Dodd-Frank did include bond baskets. Second, it argues that the final rule’s definition of “ownership interest” that provides that the “rights of a creditor to exercise remedies upon the occurrence of an event of default…” include the right to participate in the removal of an investment manager “for cause” or participate in the replacement of a manger in such circumstances.

Comment Letter on SEC Fiduciary Standard Proposal

The Securities and Exchange Commission earlier this year issued a two-part release that could impact investment managers - including loan managers. The second part of the release requests comments regarding proposed enhanced investment adviser regulation. The LSTA this week submitted a comment letter on the two proposals, broadly supporting the recommendations of the Investment Advisers Association (“IAA”). The LSTA added a recommendation regarding Form CRS that would be relevant to some registered advisers that manage loans. The IAA letters are available here and here.

Comment Letter on “Request for Information Pertaining to Production of Rates”

In response to the “Request for Information Relating to the Production of Rates”, the LSTA submitted a letter to the Federal Reserve discussing the impact of a transition from LIBOR to SOFR (or another reference rate) on the U.S. syndicated loan market. The letter discusses key stakeholders in the syndicated loan market and why they care about the transition from LIBOR to a new reference rate. In addition, the letter addressed Question 3 “Are there any changes to one or more of these rates that would make them more useful? For what purposes?”

Risk Retention Letter to Treasury

In response to a recent Executive Order from president Trump outlining “Core Principles” for financial regulation and seeking suggestions for streamlining financial regulation, the LSTA submitted a letter to Treasury Secretary Mnuchin. The letter outlines why the application of the Dodd-Frank risk retention provides no benefits but causes substantial harm to borrowers, investors, managers and, ultimately consumers, by restricting the flow of capital to American companies. The LSTA identifies three avenues to reform and proposes that the SEC, as the agency that regulates the vast majority of managers, has the ability to exercise its authority to waive the risk retention rules for CLO managers.

LSTA Incentive Compensation Letter

On Thursday August 18, 2016, the Loan Syndications and Trading Association (LSTA) submitted a comment letter to the OCC, Federal Reserve, FDIC, FHFA, NCUA and SEC in response to their notice of proposed rulemaking on Incentive-Based Compensation Arrangements.

LSTA Open End Mutual Fund Liquidity Risk Comment Letter

On Wednesday, January 13, 2016, the Loan Syndications and Trading Association (LSTA) submitted a comment letter to the SEC in response to the proposed rule on Open-End Fund Liquidity Risk Management Programs.

The LSTA submitted a comment letter to the EBA arguing that CLOs performed well in the crisis, that they have none of the characteristics identified as likely to create difficulties during periods of turmoil, and explaining that Qualified CLOs align with the principles of simple, standard and transparent securitizations.

In response to questions from the agencies, the LSTA submitted a comment letter that answered questions on whether companies issuing institutional loans are audited by PCAOB-registered accountants, whether all investors in CLOs are QIBs, and whether the SEC has access to CLO trustee reports.

LSTA Files Comment Letter to U.S. Regulators Highlighting the Bank of England and European Central Bank “Qualifying Securitisation” Proposal

LSTA submitted a letter to the U.S. Risk Retention regulators highlighting the similarity in the principles of the U.S. industry’s “Qualified CLO” proposal and the Bank of England and European Central Bank’s “Qualifying Securitisation” proposal.

LSTA Letter Requesting Changes to the Definition of Limited Life Debt Investment Entity

LSTA submitted a letter to the IRS and Treasury requesting changes to the definition of “limited life debt investment entity” in the temporary regulations implementing FATCA issued by the IRS in February 2014.

LSTA Files Comment Letter on Dodd Frank's Risk Retention Requirement

The LSTA, SIFMA and SFIG proposes the “Qualified CLO”, whereby a CLO that meets six strict criteria can meet the risk retention requirement by retaining 5% of equity, not 5% of the notional amount of a new CLO.

LSTA Files Third Comment Letter on Final Volcker Rule

LSTA Files Second Comment Letter on Final Volcker Rule

The LSTA filed a second letter to the regulatory agencies again requesting confirmation that the term “ownership interest” in the Final Volcker Rule does not include debt securities of CLOs and asking for expedited relief.

Oliver Wyman Study on Risk Retention and CLOs: This study estimates the probable impact of risk retention on CLOs, and the subsequent reduction in availability of credit and increased cost of credit for non-Investment grade U.S. borrowers.

LSTA Submits Comment Letter to the SEC on Conflicts of Interests in Securitizations

LSTA Submits Comment Letter on Regulation AB to SEC

In response to the SEC’s Re-Proposal of Shelf Eligibility Requirements for Asset-Backed Securities, the LSTA submitted a comment letter recommending that any SEC-mandated disclosure requirements for CLOs reflect the unique characteristics of syndicated loans and CLOs.

Third LSTA Comment Letter on FATCA

LSTA Submits Joint Comment Letter on Loan Participation

LSTA submitted to the Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC) a comment letter to highlight the importance of loan participations in the U.S. and global markets for syndicated loans.